MOSCOW (MRC) -- German consumer goods group Henkel raised its full-year outlook after its adhesives business reported a strong first-quarter amid a faster-than-expected rebound in the automotive and electronics industries, said Reuters.
Henkel said it now expects 2021 sales to rise an organic 4-6%, up from a previous 2-5% forecast, while earnings per preferred share should rise in the high single-digit to mid-teens percentage range, from a previous 5-15% range.
The upper end of the earnings guidance is not limited to 15%, finance chief Marco Swoboda told analysts, adding that Henkel was seeing continued strong progress in adhesives. Henkel, which makes Schwarzkopf hair care products, said it expects the hair salon business will recover significantly as coronavirus lockdowns ease, while demand for cleaning products, which was boosted by the pandemic, should return to normal.
Fewer than 10% of hair salons are still closed, while Henkel has seen very good development in the U.S. market for professional haircare products since most salons have reopened there, Chief Executive Carsten Knobel said.
First-quarter sales rose an organic 7.7% to 4.97 billion euros ($5.97 billion), ahead of guidance the company gave on March 31, driven by a rise of 13% for its adhesives unit and 4.1% growth for the laundry and home care business. Henkel said sales of its glues to the automotive and electronics sectors both grew at double-digit rates, with sales strong in both emerging and mature markets.
Beiersdorf reported that its Tesa adhesives unit saw first-quarter sales jump 24%. Henkel sees possibilities to pass on higher raw material costs via price increases, especially for adhesives in the electronics industry, Knobel said.
Henkel said the detergents business, which competes with Procter & Gamble Co, performed well, with its Persil, Pril, Bref and Somat brands posting double-digit growth, helped by pandemic demand for household cleaning.
As MRC informed earlier, Henkel has provided a business update for the third quarter and says that, based on preliminary figures, its adhesive technologies business unit achieved positive organic sales growth of 1.3% in the quarter. All business areas in adhesive technologies showed a recovery in demand compared with the second quarter, the company says. Henkel notes that in the first nine months of 2020, adhesive technologies recorded a 6.8% decline in organic sales.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
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